Digi International reported a solid Q2 2025 despite a modest revenue decline, driven by a stronger embedded services and software component and a healthier mix of recurring revenue. Revenue for the quarter was $104.5 million, down 2.97% year-over-year, but gross profit rose to $64.9 million for a gross margin of approximately 62.1%, aided by favorable product mix and early-stage software attach trends. Most important, ARR accelerated to a record $123 million, up 12% YoY and representing 29% of annualized quarterly revenues, signaling meaningful progress toward Digi’s solution-oriented, recurring-revenue model.